CUSTOMER RELATIONSHIP
MANAGEMENT
Learning Outcomes
• Understand the customer relationship
management (CRM)
• Define CRM
• Explore CRM
Introduction
• Customer Relationship Management (CRM) –
concept giving organizations to plan, design and
control strategy aiming to maintain customer
relationship efficiently.
• Globalization phenomena needs organizations to
sustain competitive advantage and use CRM as a
tool to distinguish them from competitors.
• Enable organizations to create communication
with customers at a new level.
• Internet concept, e-CRM to overcome barriers.
Introduction
• “the best organization in the world will be
ineffective if the focus on ‘customers’ is lost.
First and foremost is the treatment of individual
students, alumni, parents, friends, and each other
(internal customers). Every contact counts!”
• The focus is currently shifting from improving
internal operations to concentrating more on
customers.
Customer Relationship Management (CRM)
• CRM is a business strategy to select and manage
customers to optimize long-term value.
• CRM requires a customer-centric business
philosophy and culture to support effective
marketing, sales, and service processes.
• CRM applications can enable effective customer
relationship management, and shows that there
is a right leadership, strategy and culture that
persists in the organization.
Customer Relationship Management (CRM)
• Refers to the methodologies and tools that help
businesses manage customer relationships in an
organized way.
• CRM processes identify and target the best
customers, generate quality sales, and help
organizations to plan and implement marketing
campaigns with clear goals and objectives.
• Individualized relationships with customers and
provide the highest level of customer service to
the most profitable customers.
• Aim to improve customer satisfaction.
Customer Relationship Management (CRM)
• Customer Relationship Management is a
comprehensive strategy and process of
acquiring, retaining, and partnering with selective
customers to create superior value for the
company and the customer. It involves the
integration of marketing, sales, customer service,
and the supply-chain functions of the organization
to achieve greater efficiencies and effectiveness
in delivering customer value.
• The purpose is to improve marketing productivity.
Atul Parvatiyar & Jagdish N. Sheth (2001)
Customer Relationship Management (CRM)
• Example: a comparison of a local grocery store
where the seller has a good understanding of the
needs of individual customers and maintain a
long-term relationships.
• How about in education sector? Can you give
example about this?
Review of literature
• For practitioners, CRM represents an enterprise approach
to developing full-knowledge about customer behavior
and preferences and to developing programs and
strategies that encourage customers to continually
enhance their business relationship with the company.
• Marketing scholars are studying the nature and scope of
CRM to formulate strategies and processes for customer
classification and selectivity; one-to one relationships with
individual customers; key account management and
customer business development processes; frequency
marketing, loyalty programs, cross-selling and up-selling
opportunities; and various forms of partnering with
customers including co-branding, joint-marketing, and
other forms of strategic alliances.
•
Atul Parvatiyar & Jagdish N. Sheth (2001)
The Emergence of CRM Practice
• Growing de-intermediation process in many
industries due to the advent of sophisticated
computer and telecommunication technologies
that allow producers to directly interact with endcustomers.
• For example, in many industries such as the
airline, banking, insurance, computer software, or
household appliances industries and even
consumables, the de-intermediation process is
fast changing the nature of marketing and
consequently making relationship marketing more
popular.
The Emergence of CRM Practice
• Total quality movement. When companies
embraced the Total Quality Management (TQM)
philosophy to improve quality and reduce costs, it
became necessary to involve suppliers and
customers in implementing the program at all
levels of the value chain.
• In the current era of hyper-competition, marketers
are forced to be more concerned with customer
retention and loyalty.
The Emergence of CRM Practice
• Customer expectations have been changing
rapidly. Consumers are less willing to make
compromises or trade-offs in product and service
quality.
• Internationally oriented companies trying to
become global by integrating their worldwide
operations.
The Emergence of CRM Practice
• CRM focuses on automating and improving the
institutional processes associated with managing
customer relationships in the areas of recruitment,
marketing, communication management, service, and
support.
• In the case of a student, this might be seen through the
interaction with and between the admissions, registration,
financial aid, student accounts, and housing offices.
The Emergence of CRM Practice
• For a faculty or staff member, a CRM business strategy
would optimize interaction with departments administering
benefits, payroll, staff training, information technology (IT),
or facilities.
• From the perspective of the college or university, the CRM
business strategy provides a clear and complete picture
of each individual and all the activities pertaining to the
individual.
A CRM Process Framework
• A four-stage CRM process framework.
• Comprised of the following four sub-processes: a
customer relationship formation process; a
relationship management and governance
process; a relational performance evaluation
process, and a CRM evolution or enhancement
process.
Figure 1: The CRM Process Framework
Formation
Management and
Governance
Performance
Team Structure
Purpose
- Increase
Effectiveness
- Improve Efficiency
Role Specification
Communication
Program
- Features & Offerings
Common Bonds
Planning Process
Process alignment
Partners
- Selection Criteria &
Process
Employee motivation
Monitoring process
Evolution
- Enhancement
- Termination
Performance
- Strategic Goals
- Financial Goals
- Marketing Goals
• Loyalty
• Satisfaction
The Purpose of CRM and Its Operational Goals
• To improve marketing productivity and to enhance
mutual value for the parties involved in the relationship.
• To enhance marketing effectiveness by carefully
selecting customers for their various programs, by
individualizing and personalizing their market offerings to
anticipate and serve the emerging needs of individual
customers.
• To fulfill consumers expectations and their goals related
to efficiencies and effectiveness in their purchase and
consumption behavior.
• To build customer loyalty and commitment and to
develop new products, and to redefine the competitive
playing field for the company.
Customer Relationship Management (CRM)
Two categories:
• Operational CRM
• Analytical CRM
Operational CRM
• Products, services and operational capabilities
that enable the organization to take care of its
customers.
• Examples: contact centers, data aggregation
system, and web sites.
Analytical CRM
• Strategies and tools that drive customer-centric
business decisions.
• Examples: business intelligent systems, data
mining tools, and customer-tier strategies.
Categories of CRM
•
•
•
•
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Marketing automation
Sales automation
Service and service fulfillment
Customer self-service
E-commerce
Marketing Automation
• Bringing technology to the marketing process.
• CRM generates personalization, profiling,
telemarketing, e-mail marketing, and campaign
management.
• Involves understanding what customers do and
want, matching that knowledge with product and
service information, presenting opportunities to
customers and measuring success.
• Can you give examples in our education
environment?
Sales Automation
• Sales involve direct transferring of products and
services to customers.
• Put sales representatives in direct contact with
customers.
• Campaign management, pricing.
• Can you give examples in our education
environment?
Service and service fulfillment
• Encompasses the ability of the organizations to
serve customers that they already have.
• E-mail response management, telephony
capabilities, computer telephony integration,
interactive voice response, and predictive dialing.
• Can you give examples in our education
environment?
Customer self-service
• Aims to make the customer more active in selfservice through web self-service, search,
interactive chat, e-mail, call-me capabilities.
• Also known as e-CRM (electronic customer
relationship management), involving internet
access and wireless devices.
• Can you give examples in our education
environment?
E-commerce
• Capabilities such as shopping, marketplace,
transaction and payment processing, and security
of transactions are the prime focus.
• Involving internet access and wireless devices.
• Can you give examples in our education
environment?
e-CRM
Two components:
• The use of direct-to-customer channels,
principally e-mail and web. Emerging trends are
the use of ATMs and kiosks.
• Using IT to select relevant material to be
presented to the customer, in terms of content,
offers, and support information.
• Can you give examples in our education
environment? Paying fees through internet.
e-CRM
The key points to e-CRM:
• Fast service – customers are supposed to find
adequate information immediately.
• Meaningful – customers expect content will be
presented in an interesting interactive and
focused manner.
• Customer driven – information provided should
be what customers want to know, not what the
organization thinks customers might be interested
in.
• Let’s try on UPM web page and check.
e-CRM Technology
The channels to e-CRM:
• E-mail – however, can be voluminous and may
not be answered timely and in accurate fashion.
• Web-form technology – web forms are
structured, pre-formatted static web pages with
inputs fields that allow customers to fill out
information. Simple and inexpensive interaction.
However, there is a privacy intrusion.
• Chat technology – allows real time interactions
with customers and is becoming more popular to
replace the traditional phone call.
• Can you give examples?
8 Rules For Good Customer Service
1) Answer your phone.
2) Don’t make promises unless you WILL keep
them.
3) Listen to your customers.
4) Deal with complaints.
5) Be helpful - even if there’s no immediate profit
in it.
6) Train staff to be ALWAYS helpful, courteous,
and knowledgeable.
7) Take the extra step.
8) Throw in something extra.
Good Customer Service Is No Longer Enough
• Customers have more options than ever beforeand feel less loyalty.
• They want products and services fast, cheap,
quick-from whoever will provide them.
• The competitive advantage is now in our ability
to KEEP customers and build repeat business
and this applies in education sector as well.
Good Customer Service Is No Longer Enough
• It has to be superior, WOW, unexpected service.
In a nutshell, it means doing what you say you
will, when you say you will, how you say you will,
at the price you promised-plus a little extra
tossed.
Conclusion
• CRM refers to a conceptually broad
phenomenon of business activity, and if the
phenomenon of cooperation and collaboration
with customers becomes the dominant paradigm
of marketing practice and research, CRM has
the potential to emerge as the predominant
perspective of marketing which is also
applicable to the education sector especially the
higher education sector.